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Consumer products sales landed at $42.7 million, up from $36.2 million in the first quarter and $8.3 million in the year-ago period. Strawberry Shortcake pulled her weight in this surge, but Peanuts delivered the bulk of these gains. Consumer products accounted for 40% of DHX Media's revenue in the first half of 2018, up from 17% for the same period in 2017.

Synergies between content creation, distribution to global TV networks, and related consumer goods sales are boosting DHX's cash generation. Free cash flow stopped at $5.9 million in the second quarter, compared to cash losses of $10.7 million in the year-ago period and $32.4 million in the first quarter.

Image source: DHX Media.

What management had to say

"We remain on track to achieve our targeted annualized savings from the Peanuts integration and companywide cost-reduction program," said DHX Media CEO Dana Landry in a prepared statement. "Management remains focused on growing both revenues and cash flow, as we deliver on our commitment to de-lever."

Looking ahead

The company is exploiting the Peanuts portfolio around the world, signing co-branding partnerships with household names like Levi's and Nordstrom in the second quarter. Snoopy-themed store-in-store displays will pop up in Nordstrom locations to tie into the Chinese New Year -- it's the Year of the Dog, after all.

In keeping with that China-based promotion, DHX signed a distribution deal with Chinese digital media giant Tencent that will put 450 half-hour episodes on Tencent's Chinese streaming video services.

Based on the progress of the second quarter, DHX Media's management simply reiterated its financial goals for fiscal year 2018. As a reminder, the company aims to produce adjusted EBITDA profits of roughly $140 million this fiscal year, or $60 million of free cash flow. These targets are heavily weighted toward the back half of the fiscal year, since free cash flow stands at a negative $26.6 million through the first two quarters.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends TCEHY. The Motley Fool also recommends DHX Media and JWN. The Motley Fool has a disclosure policy.